How to Use Your Supply Chain to Gain Competitive Advantage

Last Updated March 28, 2024

Your supply chain’s primary function is to take your products from creation to delivery, but it can also provide you a competitive advantage within your industry and with your customers. From start to finish, your supply chain offers opportunities to spearhead innovation, maximize organizational savings, boost company profits, and positively impact your customers’ experience with your brand.

To leverage your supply chain for a competitive advantage, start by focusing on these key actions:

Utilize Supply Chain Technology that Adds Value

As technology transforms and disrupts industries, organizations may be tempted to embrace every new development. But the critical check is to ensure any technology your organization employs actually adds value to your supply chain. Take advantage of these advances in technology to boost the supply chain:

Enable supply chain automation through robotics: Industry giants like Amazon are using robotics to automate the supply chain, cutting overhead from operations and labor. Amazon “employs” more than 750,000 robots, according to Government Technology.

Leverage smart supply chains: Organizations can capitalize on big data sets mined from machines tagged with sensors to move supply chain planning from reactive to proactive. Applying advanced analytics enables organizations to find and predict issues before they occur, instead of detecting and responding to issues after it’s too late. While less than a quarter (23.4%) of organizations report using this now, almost 90% of respondents agreed this is a good or outstanding opportunity, according to a Supply Chain Digest Benchmark Study.

Automate orders: Errors are less likely to occur in automated processes that aren’t subject to human delays or errors and automating routine orders can help to avoid financial loss in the form of over- or under-stocking a retailer. For example, P&G leverages a standardized data warehouse that automates commerce between suppliers and retailers.

Employ artificial intelligence (AI): AI applications can tackle customer service payment processing, IT support, or operations, eliminating overhead costs. P&G is also embracing this application in its payment processing.

Enable Agile Process Improvement for Supply Chain Advantages

With technological disruptions spurring the need for constant innovation and transformation in business, staying at the cutting edge often means improving processes with agility and flexibility. Unfortunately, this type of nimble, adaptive change isn’t always easy in practice, as supply chains are subject to swings in demand impacted by forces as diverse as national politics, strikes, and natural disasters. Businesses can support process improvement in several areas:

Make supply chain management an organizational priority: In some cases, this means placing supply chain leadership in the C-Suite, ensuring the supply chain leader is skilled across multiple arenas, including conflict resolution, building relationships, technology, operations, finance, and human capital management. Not only does this executive level status ensure the organization is clear on its priority, but it also ensures the supply chain is represented within other business functions and organizations.

Integrate the supply chain with other functions: When the supply chain is ingrained in all the pertinent business functions (for example, product and service development, marketing, sales, ethics, compliance, and finance), the supply chain process can collectively be developed alongside the product itself, instead of tacking on the supply chain process when the product is ready to go.

Ask partners and stakeholders about their own flexibility: Given all the parties involved in a supply chain, supply chain leadership needs to understand each player’s individual ability to respond to swings in demand, back-up plan, measures for success, support of ethics, access to information, and decision-making practices. A flexible supply chain requires all links to be flexible.

Apply Lean Six Sigma to assess the supply chain: Through Lean Six Sigma, organizations can establish benchmarks for tracking progresses, eliminate errors, and optimize fulfillment while reducing waste.

Maximize Supply Chain Partnerships and Relationships

Supply chain partnerships are poised to make – or break – your company’s competitive advantage, as these relationships can heavily influence your supply chain sustainability, cost, and ability to adhere to timeline commitments. And, as companies vie for competitive edge, suppliers are becoming increasingly choosier about who they support. To maximize supply chain partnerships, organizations should:

View suppliers as a valuable resource: A supplier that can be integrated into the company can provide value outside of simply moving product – they can also collaborate and collectively work with your organization toward a singular strategy.

Check in regularly: To maximize your partnerships, your organization will need to evaluate the value the partner is bringing to the table in a systematic and regular way. Some goals can be established and reviewed together with the supplier.

Strive for continuous improvement: Even a good relationship has room to improve, and businesses, together with their partnerships, should hold a constant dialogue looking for ways to improve data, cut timing, reduce costs, and otherwise overhaul any processes that are holding back the process. This includes aiming to eliminate waste and managing risk.

Cultivate Team Innovation and Technology

The supply chain is complex, integrated with and impacting every facet of the business. Even an experienced supply chain manager needs to lean on departmental and team experts to maximize all aspects of the supply chain. Some considerations include:

Understand risks: Whether rolling out a new product or ramping up production to meet rising demand, supply chain managers need to understand potential roadblocks, and this requires multiple perspectives – and participation in the process before it is already underway.

Put stakeholders together to maximize perspective: Business unit leaders may lack credibility across the organization at large when advocating for something in isolation. But together, stakeholders can review the story in the data together, understand the bigger picture, and present a unified message to the organization.

Maximizing your supplier partnerships, empowering your supply chain team, and leveraging the latest processes, technology, and supply chain innovations are all practices that can enhance your competitive advantage with your supply chain. You and your team can invest in continuous knowledge to stay current with advanced supply chain management applications and industry-leading research. Michigan State University, the leader in supply chain management education, provides an end-to-end understanding of innovative practices and processes to help you cultivate a future-focused approach for a competitive supply chain.

Learn More About the Master’s Degree and Certificate Programs in Supply Chain Management from MSU.